Investment group buys Fontarome Chemical out of receivership

Fontarome Chemical Inc. has been purchased out of receivership in a deal that's good for the St. Francis firm's 40 employees, not so good for its creditors.

SFM Investments LLC, a Milwaukee group led by Patrick McComis and Joe Froehlich, submitted the winning bid for Fontarome — $2,525,000 — at an auction earlier this month, court documents show. The documents also show that SFM agreed to hire substantially all of Fontarome's employees.

The $2.5 million covers less than half of the nearly $5.7 million owed by Fontarome and a sister firm that owns its 40,000-square-foot factory and office complex and three-acre site.

Net proceeds from the sale will go to Fontarome's chief secured creditor, JP Morgan Chase Bank, which is owed nearly $4.3 million. That would leave nothing for vendors and other unsecured creditors.

Fontarome produces flavors, fragrances and pharmaceutical ingredients, and sells them internationally. SFM's purchase includes a Fontarome sales and service subsidiary in France.

Started in France in 1978, Fontarome was purchased from its French parent company in 2004 by Carl Sheeley, a chemical engineer who had been a Fontarome manager and executive since 1991.

Fontarome grew under Sheeley's ownership — in 2009 it had 70 employees — but then fell on hard times. The company filed for receivership, a proceeding similar to bankruptcy, in January. It has remained open during the proceedings.

McComis formerly was an executive at Dohmen Co.'s prescription benefits management business, Restat. He left when Dohmen sold the unit last year.

Froehlich is a managing director with Corporate Financial Advisors, a Milwaukee investment bank. He will continue with that firm.